CNMI delegation visits garment factory in China

A CNMI delegation led by members of the Strategic Economic Development Council visited a garment factory in China last week and heard a briefing from factory owners and buyers in order to gather the latest data on the CNMI garment industry’s survival amid the worldwide lifting of trade quotas.

“What we saw was a state-of-the-art facility. It’s amazing and these are the kind of factories in China that we are up against,” said Lt. Gov. Diego Benavente, who represented the administration in the delegation, which included business leaders and several factory owners from Saipan.

The delegation, which was headed by businessman Robert Jones, chair of the Strategic Economic Development Council, visited a facility consisted of a laboratory, a design center, and a fabric center where the buyers can go in and take a look at different fabrics.

Judging on the competitiveness of manufacturers in China, Benavente conceded that “it’s going to be very hard to compete.”

“What our administration and the business community is concerned with is we really want to avoid the possibility of immediate shutdown of the local industry,” said Benavente.

During a Monday meeting at the Senate chamber, Jones remarked that “the garment industry’s phase down is well underway,” but that immediate steps must be taken to preserve whatever revenue the CNMI can sustain.

He said Asian countries like China, which have cheap labor, would ship most of their goods to the United States and European countries, but that some buyers would want to keep some diversification and not risk buying from only one country. Some buyers, in fact, wished to continue doing business on Saipan if prices could remain competitive.

During the meeting, Jones distributed documents showing that the CNMI factories’ hourly compensation of $3.05 per hour is the highest compared with major supplier countries to the United States.

It showed that most Asian countries like China, the Philippines, India, Bangladesh, and Indonesia pay less than $1 per hour.

The garment industry on Saipan employs some 15,000 nonresident workers but this has gone down, with the closure of two factories and downsizing within the industry. This has resulted in the displacement of over 1,500 workers.

About 200 of them were reportedly repatriated and a couple of hundred workers are believed to have found other jobs in the CNMI.

Lay-offs in other sectors that rely on the garment industry are also expected.

In government alone, it is estimated to lose up to 2,000 jobs as a result of the industry’s downsizing and the resulting loss of revenue.